Building a biotech company is not for the faint of heart. It requires scientific expertise, business and organizational focus, and advanced knowledge of product development and commercialization to harness to formulate the company and secure fundraising to sustain growth. No one founder holds all the expertise within each of these functional areas, but rather, it’s the company comprised of team members with varied skillsets and expertise that results in cross-functional talent that contributes to a biotech’s ability to survive, scale, and thrive – to build a forever biotech – that sustains product development and fundraising complexities.
We’ve observed through our own varied experiences and conversations with successful biotech founders that there is a commonality with their success and that is the ability to be grounded in the following growth strategies from the onset:
In this blog post, we will build upon these three strategies to serve as a framework to build a forever biotech. It’s not going to be easy, but it can be manageable.
Building a Business Model Around a Core Asset
A biotech founder, first and foremost, must believe in their product and that it’s addressing an unmet need for patients. Assuming there’s excitement around the product, for example, let’s say a biotech has a small molecule therapeutic with strong efficacy data via a mouse model, and effective pharmacokinetics properties in a therapeutic area with a high unmet medical need, where should they begin if they want to get their therapeutic into a clinical trial?
Beginning with an internal Integrated Development Plan (IDP) is essential because it provides a roadmap for a biotech company that defines the steps necessary to support entry into the clinic, particularly for early stages companies, and even more, how to support the product through later stages of development like commercialization. This plan is essentially an internal tool to streamline development strategy, highlight efficient development pathways, and optimize the speed and efficiency of product development.
The plan is then broken down by activities and functional areas across clinical development, regulatory, chemistry, manufacturing, and controls (CMC), and non-clinical development team members. The goal of the IDP is to accelerate progress and become fully prepared to implement the plan so the company can continue to reach milestone success and reach its next phase of growth.
The following key elements should be included in the IDP:
Ideally, the IDP is kicked-off by the Program Manager to confirm alignment on the scope of the plan, ensure deliverables, and provide key timelines to all those cross-functional team members to build their business model around a core asset.
Once that plan is kicked-off, there are more complex questions to consider if that biotech wants to scale and grow, such as ‘how do you develop a pipeline from a single core asset?’ It’s been shared with industry colleagues that “companies that are built on a platform are still here!” Let’s explore.
But to grow and scale, companies will need to attract investors.
Raising Sustainable Capital
Funding sources for a biotech are varied, especially due to the proliferation of biotech and life science companies over the past decade. However, a lack of access to reliable and sustainable capital sources is often a key reason that new or emerging biotechs often fail before reaching their potential. The challenge is this – there is no blueprint! There is no one-size-fits-all solution for capital formation and the options are vast. Moving beyond the traditional ‘family and friends’ funded biotechs, here is a non-exhaustive, but comprehensive list of funding sources.
For the early-stage biotechs, some funding options are more appropriate than others, but we’ve found that investor partner compatibility is crucial for success. For example, if you go the strategic transaction route, can your partner develop your asset faster and better? If you’re going the venture capital route, are their skills and mindset complimentary to yours? And in all scenarios, do you appreciate the way each potential investor behaves in the negotiation process? The answers to these questions matter because the partnership dynamics – the relationship – between the company and investors will determine the path ahead for the company.
Now let’s throw in another dynamic, which is the broad life science downturn in the market, and access to capital isn’t as easy as it was two years ago. This puts biotechs in a position to be even more critical with their future investment choices and the existing capital they hold to sustain their organization.
Small, private biotechs need to make tough decisions to survive, like reducing budgets and timelines where appropriate, staying focused and aligned on their IDP, and ensuring the right talent so that they have more of a chance to develop their core asset faster to harness the capital that is right for them for future growth.
As companies design their investment pitch strategy, the following considerations are critical in this tight financial market:
This won’t be an easy path ahead, but if you pitch to more types of investors, practice patience, trim costs where appropriate, and ultimately choose the right choice for your organization, your early-stage biotech may have a better chance of thriving.
Developing a Pipeline from a Single Core Asset
Once more funding is secured, biotech leaders may evaluate creating a product pipeline from a single core asset. This process helps to de-risk a company from relying on a single asset and potentially staring at failure with nothing else in the pipeline. But where should companies start in this approach?
A company’s pipeline is also what investors typically are looking for. For example, what pipeline will be required for a company to grow and mature in the business? How many products will it take to win in the marketplace?
We recommend starting with competitive intelligence analysis of the market needs. Competitive intelligence is a continuous process that occurs throughout early and late-stage development and encompasses the entire development lifecycle. How to leverage all this information is a major component of this exercise, and the information gathered is from insights on patient-centric recruitment strategies and trial design, trending clinical strategies as well as clinical and regulatory precedence, accessible regulatory pathways, special designations, decentralized and data-driven technologies, and macroeconomic data affecting the entire industry. All this information is essential because it can serve as insight into how a company’s pipeline can win in the marketplace and shape development strategies.
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Learn how Halloran Consulting Group takes a personalized and integrated approach to help companies like yours through every stage of clinical development strategy. Please contact our team to have a conversation.